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In an unusual Saturday vote, the Senate approved a $30 billion package to extend unemployment benefits, a payroll tax holiday for millions of American workers and to avoid cuts in payments to doctors who accept Medicare through February, when Congress will once again be locked in battle over whether and how to further extend those provisions.

The agreement — should it get through the House — mirrors a series of 11th-hour deals devised by the the 112th Congress that appear to solve an impending crisis, but simply push forward, most notably the agreement last summer to raise the debt ceiling. That created a 12-member Congressional committee whose job was to complete the deficit reduction goals that Congress failed to achieve on their own. That group achieved nothing, necessitating the legislation that Congress is wrangling with now.

A failure to even extend a modest tax break for 160 million Americans for a single year — something both sides would love as political feather’s in their election-year caps — is particularly remarkable in a Congress charged with far more significant items.

“Today is an important day for our country,” said Senator Harry Reid of Nevada, the majority leader, as he explained from the Senate floor Saturday why his chamber would be voting on a bill, conceived Friday in private between Senate leaders to extend the tax for only two months. “We are doing today exactly what the Founding Fathers thought we would do,” and passage of the bills is “an accomplishment important for the American people.”

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House Republicans zeroed out all three parts of the president’s Neighborhood Revitalization Initiatives: the school-centered Promise Neighborhoods, the housing-focused Choice Neighborhoods and the law enforcement-oriented Byrne Criminal Justice Initiative.

City Limits Reports:

All three programs reflect the administration’s belief in place-based strategies that coordinate multiple agencies and programs to improve a particular neighborhood, city or region. This approach undergirds not only anti-poverty funding but also Obama’s urban-planning strategy, where the Partnership for Sustainable Communities is pooling funding from the Department of Housing and Urban Development (HUD), Environmental Protection Agency and Department of Transportation to address interlinked housing, transit and environmental challenges that particular places face. In 2009, the White House ordered all federal agencies to conduct a place-based review of their policies to see where arbitrary borders between departments might be adjusted to make programs work better and cheaper.

Read More At CityLimits.org

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Yesterday, a coalition of 5,000 pastors, led by the Washington-based social-justice group Sojourners, is releasing an open letter to Congress saying they’d like to form a “Circle of Protection around programs that meet the essential needs of hungry and poor people at home and abroad.”

Read More At Elev8.com

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According to a report in The Washington Post, in 1979 the U.S. reached a last-minute approval that resulted in technical malfunctions in processing the backlog of paperwork, and subsequently thousands of late payments to holders of Treasury bills that were maturing that April and May.

While brief and inadvertent, the U.S. did technically default on loans.

The Treasury had missed payments on about $120 million worth of bills that led to a class suit against the Government. The bills were eventually payed with back interest.

The Washington Post Reports:

“It’s not as if God appeared to Moses on Mount Sinai and said, ‘The U.S. will always be a AAA credit.’ Our reputation is something that we have earned,” Angel said, adding that history is filled “with countries that were once great and blew it. The simple lesson is, you’ve got to pay your bills on time. If you don’t pay your bills on time, bad things happen.”

Read More At WashingtonPost.com

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Time Magazine is reporting that the government has a new right to track citizens every move through GPS devices on cars.

Government agents can sneak onto your property in the middle of the night, put a GPS device on the bottom of your car and keep track of everywhere you go. This doesn’t violate your Fourth Amendment rights, because you do not have any reasonable expectation of privacy in your own driveway – and no reasonable expectation that the government isn’t tracking your movements.

READ THE WHOLE STORY

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WASHINGTON – America’s “Great Compromiser” Henry Clay called government “the great trust,” but most Americans today have little faith in Washington’s ability to deal with the nation’s problems.

Public confidence in government is at one of the lowest points in a half century, according to a survey from the Pew Research Center. Nearly 8 in 10 Americans say they don’t trust the federal government and have little faith it can solve America’s ills, the survey found.

The survey illustrates the ominous situation President Barack Obamaand the Democratic Party face as they struggle to maintain their comfortable congressional majorities in this fall’s elections. Midterm prospects are typically tough for the party in power. Add a toxic environment like this and lots of incumbent Democrats could be out of work.

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The survey found that just 22 percent of those questioned say they can trust Washington almost always or most of the time and just 19 percent say they are basically content with it. Nearly half say the government negatively effects their daily lives, a sentiment that’s grown over the past dozen years.

This anti-government feeling has driven the tea party movement, reflected in fierce protests this past week.

“The government’s been lying to people for years. Politicians make promises to get elected, and when they get elected, they don’t follow through,” says Cindy Wanto, 57, a registered Democrat from Nemacolin, Pa., who joined several thousand for a rally in Washington on April 15 — the tax filing deadline. “There’s too much government in my business. It was a problem before Obama, but he’s certainly not helping fix it.”

Majorities in the survey call Washington too big and too powerful, and say it’s interfering too much in state and local matters. The public is split over whether the government should be responsible for dealing with critical problems or scaled back to reduce its power, presumably in favor of personal responsibility.

About half say they want a smaller government with fewer services, compared with roughly 40 percent who want a bigger government providing more. The public was evenly divided on those questions long before Obama was elected. Still, a majority supported the Obama administration exerting greater control over the economy during the recession.

“Trust in government rarely gets this low,” said Andrew Kohut, director of the nonpartisan center that conducted the survey. “Some of it’s backlash against Obama. But there are a lot of other things going on.”

And, he added: “Politics has poisoned the well.”

The survey found that Obama’s policies were partly to blame for a rise in distrustful, anti-government views. In his first year in office, the president orchestrated a government takeover of Detroit automakers, secured a $787 billion stimulus package and pushed to overhaul the health care system.

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But the poll also identified a combination of factors that contributed to the electorate’s hostility: the recession that Obama inherited from President George W. Bush; a dispirited public; and anger with Congress and politicians of all political leanings.

“I want an honest government. This isn’t an honest government. It hasn’t been for some time,” said self-described independent David Willms, 54, of Sarasota, Fla. He faulted the White House and Congress under both parties.

The poll was based on four surveys done from March 11 to April 11 on landline and cell phones. The largest survey, of 2,500 adults, has a margin of sampling error of 2.5 percentage points; the others, of about 1,000 adults each, has a margin of sampling error of 4 percentage points.

In the short term, the deepening distrust is politically troubling for Obama and Democrats. Analysts say out-of-power Republicans could well benefit from the bitterness toward Washington come November, even though voters blame them, too, for partisan gridlock that hinders progress.

In a democracy built on the notion that citizens have a voice and a right to exercise it, the long-term consequences could prove to be simply unhealthy — or truly debilitating. Distrust could lead people to refuse to vote or get involved in their own communities. Apathy could set in, or worse — violence.

Democrats and Republicans both accept responsibility and fault the other party for the electorate’s lack of confidence.

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“This should be a wake-up call. Both sides are guilty,” said Sen. Claire McCaskill, D-Mo. She pointed to “nonsense” that goes on during campaigns that leads to “promises made but not promises kept.” Still, she added: “Distrust of government is an all-American activity. It’s something we do as Americans and there’s nothing wrong with it.”

Sen. Scott Brown, a Republican who won a long-held Democratic Senate seat in Massachusetts in January by seizing on public antagonism toward Washington, said: “It’s clear Washington is broken. There’s too much partisan bickering to be able to solve the problems people want us to solve.”

And, he added: “It’s going to be reflected in the elections this fall.”

But Matthew Dowd, a top strategist on Bush’s re-election campaign who now shuns the GOP label, says both Republicans and Democrats are missing the mark.

“What the country wants is a community solution to the problems but not necessarily a federal government solution,” Dowd said. Democrats are emphasizing the federal government, while Republicans are saying it’s about the individual; neither is emphasizing the right combination to satisfy Americans, he said.

From the New York Times:

An unusual and much-heralded program that gave poor families cash to encourage good behavior and self-sufficiency has so far had only modest effects on their lives and economic situation, according to an analysis the Bloomberg administration released on Tuesday.

The three-year-old pilot project, the first of its kind in the country, gave parents payments for things like going to the dentist ($100) or holding down a full-time job ($150 per month). Children were rewarded for attending school regularly ($25 to $50 per month) or passing a high school Regents exam ($600).

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When the mayor announced the program, he said it would begin with private money and, if it worked, could be transformed into an ambitious permanent government program.

But city officials said Tuesday that there were no specific plans at this time to go forward with a publicly financed version of the program. In an announcement at BronxWorks, a nonprofit social services agency, Mayor Michael R. Bloomberg pointed to a few examples of success: High school students who met basic proficiency standards before high school tended to increase their attendance, receive more class credits and perform better on standardized tests; more families went to the dentist for regular checkups.

But the elementary and middle school students who participated made no educational or attendance gains. Neither did high school students who performed below basic proficiency standards before high school.

Click here to read more.

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Kenya’s Poor Suffer Under Corrupt Government

Thousands of Kenyan women vowed Wednesday to begin a weeklong sex strike to try to protest their country’s bickering leadership, which they say threatens to revive the bloody chaos that convulsed the African country last year.

Leaders from Kenya’s largest and oldest group dedicated to women’s rights, the Women’s Development Organization, said they hope the boycott will persuade men to pressure the government to make peace.

Eleven women’s groups are participating in the strike. The groups have also called on the wives of President Mwai Kibaki and Prime Minister Raila Odinga to abstain. It was not clear how either wife responded to the request.

“We have looked at all issues which can bring people to talk and we have seen that sex is the answer,” said Rukia Subow, chairman of the Women’s Development Organization. “It does not know tribe, it does not have a (political) party and it happens in the lowest households.”

Sex strikes are rare worldwide. Many men in Kenya are polygamous, as is allowed by law.

Kenyan government spokesman Alfred Mutua said he was unaware of the strike.

The disputed election between Kibaki and then-challenger Odinga led to violence that killed more than 1,000 people and left more than 600,000 homeless. The two were installed after a month of mediation, but infighting has threatened to break apart the fragile coalition.

The government’s case against Barry Bonds includes several positive drug test results that prosecutors say belong to the former San Francisco Giants slugger.

That evidence will be part of hundreds of pages of court filings by prosecutors and Bonds’ attorneys that a federal judge plans to unseal Wednesday.

The documents are expected to reveal details of the government’s allegations against Bonds, who is accused of lying to a grand jury about alleged use of performance-enhancing drugs.

Among the positive drug test results is a urine sample submitted by Bonds during baseball’s anonymous testing program in 2003, according to a New York Times report.

Bonds’ sample did not test positive under MLB’s program but was retested by investigators after it was seized in a 2004 raid, anonymous sources told the newspaper.

The documents to be released Wednesday will also include a transcript of a recorded conversation between Bonds’ personal trainer, Greg Anderson, and Bonds’ former business partner, Steve Hoskins.

Bonds is expected to plead not guilty to perjury charges for the third time Thursday, the same day U.S. District Court Judge Susan Illston will consider what government evidence to exclude from the slugger’s trial next month.

Bonds has pleaded not guilty twice before, the first time in November 2007 when prosecutors unsealed an indictment charging him with perjury and obstruction of justice. A judge has ordered prosecutors to revise the indictment twice to repair legal technicalities. Bonds pleaded not guilty after the first revision but has yet to appear in court to answer to the second revised indictment, which was unsealed on Dec. 4.

Prosecutors say Bonds lied to a federal grand jury when he denied knowingly taking performance enhancing drugs during his pursuit of the game’s single-season home run mark and Hank Aaron’s vaunted career record.

Bonds testified in December 2003 that he took substances provided by Anderson, his personal trainer, that the government says were a designer steroid. But Bonds told the grand jury that he did not know he was taking performance-enhancing drugs at the time. He also has denied knowingly taking other steroids and human growth hormone.

Prosecutors argue they can prove through positive test results and other evidence that Bonds lied.

Bonds’ attorneys are seeking to exclude several urine and blood test results from the trial, which is scheduled to start March 2.

When Bonds’ attorneys filed court papers on Jan. 15 looking to exclude the material, they filed the details of their argument under seal. They argued that making details of the test results public would harm Bonds’ chances of getting a fair trial by tainting potential jurors.

The government’s response, which includes much of the evidence it intends to show jurors, was filed under seal last week.

The judge initially ordered those documents to remain under seal. But she changed her mind earlier this week after The Associated Press, San Francisco Chronicle and San Jose Mercury News protested. Illston said Tuesday that the release of the documents will not hurt Bonds’ chances for a fair trial.

Lead prosecutor Matt Parrella declined comment. Bonds’ lead attorney Allen Ruby said he would not fight the judge’s unsealing order.

In the shared article “SOME CHRISTIANS UP IN ARMS OVER OBAMA’S ACKNOWLEGDEMENT OF NON BELIEVERS…” Obama takes some heat for acknowledging atheists as well as other religions. What do you think? Join the discussion here.

Twin crises of the economy and Iraq figured to take center stage Wednesday, Day One for the new administration.

“Tonight, we celebrate. Tomorrow, the work begins,” Obama declared Tuesday night at the Commander in Chief Ball, one of 10 official black-tie celebrations that kept him up late into the night.

The first full day of the Obama presidency promised to be packed, at the White House and on Capitol Hill. It also promised to reveal much about how Obama intends to govern for the next four years, in style and substance.

Both ends of Pennsylvania Avenue now are controlled by Democrats, providing a chance for the Obama administration to succeed if he and fellow lawmakers of the same party can work in concert effectively and if divergent Democratic interest groups don’t pull the new president in too many directions.

The capstone to four days of inaugural festivities takes place at the Washington National Cathedral on Wednesday morning, with a national prayer service that is a tradition dating to George Washington’s time. Obama and his wife, Michelle, were to welcome hundreds of members of the public to a White House open house, part of his pledge to make government and those who govern more accessible.

A meeting with his economic team was planned to assess his approach and plot the way forward. Taking over the White House with 11 million Americans out of work and trillions of dollars in stock market savings lost, Obama said turning around the limping economy is his first and greatest priority.

Congress already has given him a second installment of financial-industry bailout money, worth $350 billion, and is fast-tracking a massive economic stimulus bill of $825 billion or more. Even those bold measures, on top of hundreds of billions in other federal spending over recent months, may not be enough to prevent the recession from growing deeper.

“Fortunately, we’ve seen Congress immediately start working on the economic recovery package, getting that passed and putting people back to work,” Obama said in an ABC News interview. “That’s going to be the thing we’ll be most focused on.”

The war in Iraq that he has promised to end was featuring prominently in Obama’s first day as well.

He was convening senior commanders and top national security aides — including holdover Defense Secretary Robert Gates and the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen — to begin to make good on his pledge to, as he put it in his inaugural address, “responsibly leave Iraq to its people and forge a hard-earned peace in Afghanistan.”

The two unfinished wars are twinned for Obama. He has promised to bring U.S. combat troops home from Iraq within 16 months of taking office, as long as doing so wouldn’t endanger either the Americans left behind for training and terrorism-fighting nor the security gains in Iraq. And he has said he would use that drawdown to bolster the U.S. presence in Afghanistan, where U.S.-backed fighters are losing ground against a resurgent Taliban.

While Obama gets to work in earnest at the White House, Congress planned to do its part.

A Senate committee was going over a huge portion of Obama’s economic revival package. On the other side of the Capitol, the House planned a vote on legislation setting conditions on Obama’s use of the new infusion of financial bailout money.

Work on getting the Obama administration fully staffed was also proceeding.

Within hours of Obama assuming the presidency, the Senate approved six members of his Cabinet. His choice of Hillary Rodham Clinton to be secretary of state awaited Senate action Wednesday, her confirmation held up for a day by Republican concern over the foundation fundraising of her husband, the former president.

Also left unconfirmed was Timothy Geithner, the nominee to head the Treasury Department. He faces the Senate Finance Committee, also Wednesday, where he will have to explain his initial failure to pay payroll taxes he owed while working for the International Monetary Fund.

The Senate Judiciary Committee could take up the question of Eric Holder for Obama’s attorney general.

The new president signaled that a flurry of executive actions, studied and prepared during his two-month-plus transition, will come quickly too.

Among the possibilities for the first day was the naming of a Middle East envoy, critical at a time of renewed hostilities between Israelis and the Palestinians; an order closing the U.S. military prison at Guantanamo Bay, Cuba, a move that will take considerable time to execute and comes on the heels of a suspension of war crimes trials there pending a review; prohibiting — in most cases — the harsh interrogation techniques for suspected terrorists that have damaged the U.S. image around the globe; overturning the so-called Mexico City policy that forbids U.S. funding for family planning programs that offer abortion; and lifting President George W. Bush’s limit on federal funding of embryonic stem cell research.

Preventative action was taken Tuesday already. New White House chief of staff Rahm Emanuel ordered all federal agencies to put the brakes on any pending regulations that the Bush administration tried to push through in its waning days.

On the slightly more distant horizon, but part of the immediate workload, were the early February due date for sending the outlines of Obama’s first budget request to Capitol Hill and plans for a State of the Union-like speech within weeks to a joint session of Congress.

Within hours of Abdullahi Yusuf‘s resignation, mortars shells slammed into the pockmarked streets near the presidential palace in the capital, Mogadishu, where the government maintains only a token presence.

“Most of the country is not in our hands,” Yusuf said in a speech before parliament in Baidoa — one of the only towns controlled by Somalia’s government, which has been sidelined by Islamic insurgents with alleged ties to al-Qaida.

In the address broadcast nationwide on the radio, Yusuf said he could not unite Somalia’s bickering leadership and that the country was “paralyzed.”

“After seeing all these things, I have finally quit,” said Yusuf, who was president for four years. Meanwhile, troops from neighboring Ethiopia are scheduled to pull out this week, leaving a massive power vaccum after two years of propping up the weak Somali government.

The parliament speaker will stand as acting president until parliament elects a new leader within 30 days. There have been no announcements of who might be under consideration, but many believe Yusuf’s absence will allow moderate Islamist leaders into the government, which Yusuf had largely rejected.

Yusuf is the latest leader to have failed to pacify Somalia during two decades of turmoil. The Horn of African country has been beset by anarchy, violence and an insurgency that has killed thousands of civilians and sent hundreds of thousands fleeing for their lives.

There have been more than a dozen attempts to form an effective government since 1991. Meanwhile, all public institutions have crumbled and the once-beautiful seaside capital is now a gun-blasted shantytown.

The most aggressive Islamic insurgency group, al-Shabab, has made dramatic territory gains in recent months, and insurgents now control most of the country. In a statement Monday, al-Shabab said Yusuf was resigning “with shame.” The statement said it was too early to tell if Yusuf’s replacement would be an improvement.

The United States accuses al-Shabab of harboring the al-Qaida-linked terrorists who blew up the U.S. embassies in Kenya and Tanzania in 1998. Many of the insurgency’s senior figures are Islamic radicals; some are on the State Department’s list of wanted terrorists.

The U.N. envoy to Somalia, Ahmedou Ould-Abdallah, who has been trying to salvage an ineffective peace deal in the country, lauded Yusuf’s resignation and said “a new page of Somalia history is now open.”

The United Nations has brokered peace deals between the government and an opposition faction, but they have failed to quell the political and violent chaos. Al-Shabab has refused to participate in the talks.

Yusuf, who like many of Somalia’s leaders is a former warlord, has been accused of being an obstacle to peace. Earlier this month, he tried to fire his prime minister, but was rebuffed by parliament. Neighboring countries, including Kenya, have threatened to impose sanctions on Yusuf and his family.

“I am happy that the Somali president has resigned,” Prime Minister Nur Hassan Hussein said. “I wish him to become Somali elder and play a role in the common endeavor to restore peace and order in Somalia.”

Thousands of civilians have been killed or maimed by mortar shells, machine-gun crossfire and grenades in near-daily fighting in this arid country. The U.N. says Somalia has 300,000 acutely malnourished children, but attacks and kidnappings of aid workers have shut down many humanitarian projects.

The lawlessness also has allowed piracy to flourish off the coast.

Rights groups have accused all sides in the conflict — Islamic insurgents, the government and Ethiopian troops — of committing war crimes and other serious abuses for indiscriminately firing on civilian neighborhoods.

Ethiopia‘s planned withdrawal of troops would end their unpopular presence and leave the administration more vulnerable to insurgents. The Ethiopians entered Somalia two years ago with the tacit approval of the United States to drive out an earlier group of Islamic insurgents.

Somalia has been ravaged by violence and anarchy since warlords overthrew dictator Mohamed Siad Barre in 1991 and then turned on one another. The current transitional government was formed with U.N. help in 2004.

Yusuf, a former Somali army colonel in the 1960s, was jailed by Barre when he refused to cooperate in a coup d’etat in 1969. Although Yusuf is a member of one of Somalia’s four biggest clans, the Darod, he was unpopular in Mogadishu because of his ties to Ethiopia — one of Somalia’s traditional enemies.

In an interview with the Washington Post, Bill Gates seemed open and optimisitc to having a role in Obama’s new government.

Gates said:

Certainly my full-time job is being chairman of the foundation,…if there was some committee or pretty focused task where I could contribute, I’d be glad to consider that, and I hope that the things we’ve learned about education — including the mistakes we’ve made — I hope we do get a strong dialogue and I’m very optimistic we’ll have that with these people

Gates also met with Vice President Elect, Joe Biden yesterday. The twotalked about global health inititives and ways to improve education in America.

Of course, that wouldn’t be such a peril to us if those groups were a) willing to be held responsible for the lives of those individual participants who invest so much and b) accepted their failures as a personal fault as much as our failures. The established idea of credit (extended from the idea of slavery) is that your work will somehow credit you for future purchases and worth. Should your work fall short of the goods you’ve bought and acquired, you assume debt. If you cannot pay back that debt, you file for bankruptcy and start over, your name and credit damaged for some time. Somewhere between the history of using paper currency instead of traded goods to using promised paper currency, Americans accepted the ordeal of permanent debt to those larger institutions. Can’t pay for college? Take out loans. Can’t afford a home? Take out loans, and leverage your salary against them. Need to send your kids to school with a new car? Refinance that first loan you took out and increase debt with little thought to repayment. After all, what’s debt when you die?

This confused process of imaginary money has led us to the demolishing trend of today: personal and corporate responsibility have dissipated. But even more offensive, the government’s knee-jerk reaction has been to safeguard the ones at the top, save their failures topple our lives in total.

Never has the argument for reparations loomed so prominently.

The previously prevalent notion of leaving the mistakes of the past to bear out on your credit line has been tossed to the wayside for a more communal approach; specifically, rescuing every Bob and Barry CEO in the nation with a gentle billion-dollar nudge into continued prosperity. In fact, the rescue language has become so brisk in the mouths of the Pelosis, Reids, Bushes and Obamas that it seems we’d collectively panic if not for the concerted efforts of the Treasury and Federal Reserve to give our industries life. When the mortgage lenders went under, we feared we would lose any homes not fully paid for. As the banks crumbled, businesses and universities worried about the ability to secure loans for another quarter. The pervasive language of anxiety over our declining capitalism made it reasonable to say that government funds should (gasp) help the citizens of our nation…albeit the richest one percent of our citizens, but we had to start somewhere.

Naturally, we should look to the labor force that built the garrisons of industry during the Transatlantic slave trade. Enslaved Africans have been mired in our economic future since the merchant class of New England used their hands and tears to make colonial farms and banks profitable. The tobacco industry gave way to the cotton and textile industry gave way to the sharecropping industry, all of which yielded millions for corporations still existing today. Since that debt has never been repaid, neither in cash nor in resources, the government has its biggest mortgage crisis yet in addressing that history. As automakers fly in private jets with hands outstretched to cushion their already luxurious lives of spendthrift, where are the billions set aside for the descendants of slaves to recoup on their education debt? Where are the billion-dollar bailouts for the men and women who were denied opportunity until recently for their access into higher industry and government? The Native Americans slaughtered by disease and deprivation have only detached casino revenues (which never reach their depressed population), and Black Americans have some stake in sports and entertainment (until we even, says Jay-Z).

As much as Obama’s electoral victory presented us with a new model of racial politics — or the beginnings of new racial politics — we have yet to see the same sympathy for our cheated countrymen of color that’s been extended to reckless executives and tiresome financiers. Supposedly, we should feel proud that the CEOs of GM, Chrysler and Ford have (grudgingly) given up their exorbitant salaries for $1-a-year nominal fees. In fact, I would feel more heartened by that tipping of the scales if descendants of Asian-American railroad workers got their cash retributions for their opening of the Western frontiers. Or, I would feel encouraged if the Mexican workers responsible for every part of our bottom-rung jobs were fairly rewarded with health benefits. As we make steps to provide safety nets for those elites who have toddled with their great-grandparents’ inheritance dollars, we should also consider those of us who never had the advantages (and never expected any), but have braved past those obstacles to create new wealth. Since reparations is an accursed term, I’m comfortable with just labeling it a “bailout” for now.

Unless one of Detroit‘s other Big Three auto companies goes bust, Ford expects to have enough money to make it through next year without government help, it said in a plan that projected the firm will break even or turn a pretax profit in 2011.

Detroit’s automakers, making a second bid for $25 billion in funding, are presenting Congress with plans Tuesday to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.

General Motors Corp., Ford and Chrysler LLC said they would refinance their companies’ debt, cut executive pay, seek concessions from workers and find other ways of reviving their staggering companies.

The Big Three executives also are offering a series of mostly symbolic moves to burnish their images, badly tattered after they arrived in Washington D.C. last month on three separate private jets to plead for a federal lifeline for their struggling companies. All three companies offered separate plans for hearings that will be held Thursday and Friday.

That approach the auto executives took last month led Democratic congressional leaders to declare they didn’t come prepared to justify their pleas and they told them to go back home and ready a new plan.

This week, the automakers are going out of their way to show deference to lawmakers and a willingness to flog themselves for past mistakes. “I think we learned a lot from that experience,” Ford CEO Alan Mulally told The Associated Press in an interview.

Mulally said he’d work for $1 per year if his firm had to take any government loan money. The company’s plan also says it will cancel all management employees’ 2009 bonuses, scrap merit increases for its North American salaried employees next year, and sell its five corporate aircraft.

And for this week’s appearances here, all three company chiefs will skip the lavish travel arrangements. Mulally is coming by car from Detroit for this week’s second round of congressional hearings on government help for the Big Three. GM Chief Rick Wagoner will drive a Chevrolet Malibu hybrid sedan for the 520-mile trek from Detroit to Capitol Hill, spokesman Tony Cervone said Tuesday. And Chrysler LLC CEO Robert Nardelli won’t travel by corporate jet, but a spokeswoman declined to elaborate on his travel plans, citing security reasons.

The unions were preparing to make sacrifices as well. United Auto Workers leaders summoned local union leaders from across the country to an emergency meeting Wednesday in Detroit to discuss concessions the union could make to help auto companies get government loans.

U.S. automakers are struggling to stay afloat heading into 2009 under the weight of an economic meltdown, the worst auto sales in decades and a tight credit market. General Motors, Ford and Chrysler went through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler have said they could collapse in weeks.

Meanwhile, the auto companies released new sales numbers that underlined the punishing business environment facing the Big Three. Ford said its November U.S. light vehicle sales tumbled 31 percent amid a continued slump in consumer spending and tight credit markets. Sales at Toyota, Japan’s No. 1 automaker, fell 34 percent despite its extension of zero-percent financing on a dozen vehicles.

Ford’s blueprint said it would invest $14 billion over the next seven years to boost its vehicles’ fuel-efficiency, and improve the overall efficiency of its fleet by an average of 14 percent next year. And Ford is calling for a new partnership among automakers, parts suppliers and the government to develop new battery technologies domestically, so the U.S. doesn’t have to rely on foreign batteries — as it now does on foreign oil — to power its cars.

GM will outline efforts to negotiate swapping some of the company’s debt for equity stakes in the automaker, either shares or warrants for them, said two people briefed on the company’s plan.

With eight separate brands, GM will also discuss efforts to shed brands but it would prefer to sell them instead of shutting down Pontiac, Saturn or Saab, said one of the people briefed on the plan. Killing off brands, like GM did with Oldsmobile in 2004, would require cash the company doesn’t have, the person said. The people briefed on GM’s preparations didn’t want to be identified because the plan hadn’t been completed.

Chrysler is expected to outline changes that would include a swap of debt in the company for equity stakes and reductions in some vehicle models, according to a person who was briefed on the plan. The person spoke on condition of anonymity because the discussions were private.

GM, according to its quarterly report filed with the Securities and Exchange Commission, owes creditors $45 billion and it must pay more than $7.5 billion early in 2010 to a UAW-administered trust fund that will take over retiree health care payments.

Ford owes more than $26 billion, with $6.3 billion due to its UAW trust fund at the end of 2009. Chrysler, a private company, does not have to open its books, but its CEO, Nardelli, has said it would be difficult for the company to make it without federal aid. All three likely are negotiating with the UAW for delays in payments to the trusts.

The companies are resisting calls for bankruptcy, arguing that no one would buy a car from an automaker that may not survive the life of the vehicle.

Regulators hope the dramatic action will bolster badly shaken confidence in the once-mighty banking giant as well as the nation’s financial system, a goal that so far has been elusive despite a flurry of government interventions to battle the worst global crisis since the 1930s.

Wall Street appeared encouraged as stock futures moved higher ahead of the market opening in New York. Dow Jones industrial average futures rose almost 2 percent. Stock markets in Britain and Germany gained more than 4 percent in afternoon trading. Citigroup shares themselves climbed 44 percent to $5.64 in premarket trading.

“If they didn’t help, the damage would be beyond imagination,” said Teck-Kin Suan, economist at United Overseas Bank in Singapore.

The action, announced late Sunday by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp., is aimed at shoring up a huge financial institution whose collapse would wreak havoc on the already fragile financial system and the U.S. economy.

“With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy,” the three agencies said in a joint statement. “We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks.”

Analysts said a Citigroup failure would have seized up still fragile lending markets and caused untold losses among institutions holding debt and financial products backed by the company.

“It would create chaos,” said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $3 billion in equities in Asia. “Simply put, you couldn’t borrow or lend for a while. This is a nightmare scenario.”

The bold move is the latest in a string of high-profile government bailout efforts. The Fed in March provided financial backing to JPMorgan Chase’s buyout of ailing Bear Stearns. Six months later, the government was forced to take over mortgage giants Fannie Mae and Freddie Mac and throw a financial lifeline — which was recently rejiggered — to insurer American International Group.

Critics worry the actions could put billions of taxpayers’ dollars in jeopardy and encourage financial companies to take excessive risk on the belief that the government will bail them out of their messes.

The Citigroup rescue came after a weekend of marathon discussions led by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke. Timothy Geithner, president of the Federal Reserve Bank of New York, who is being tapped by President-elect Barack Obama as his Treasury chief also participated.

Vikram S. Pandit, Citi’s chief executive officer, welcomed the action. “We appreciate the tremendous effort by the government to assure market stability,” he said in a statement issued early Monday.

The $20 billion cash injection by the Treasury Department will come from the $700 billion financial bailout package. The capital infusion follows an earlier one — of $25 billion — in Citigroup in which the government also received an ownership stake.

As part of the plan, Treasury and the FDIC will guarantee against the “possibility of unusually large losses” on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.

Under the loss-sharing arrangement, Citigroup Inc. will assume the first $29 billion in losses on the risky pool of assets. Beyond that amount, the government would absorb 90 percent of the remaining losses, and Citigroup 10 percent. Money from the $700 billion bailout and funds from the FDIC would cover the government’s portion of potential losses. The Federal Reserve would finance the remaining assets with a loan to Citigroup.

In exchange for the guarantees, the government will get $7 billion in preferred shares of Citigroup. In addition, Citi said it will issue warrants to the U.S. Treasury and the FDIC for approximately 254 million shares of the company’s common stock at a strike price of $10.61.

As a condition of the rescue, Citigroup is barred from paying quarterly dividends to shareholders of more than 1 cent a share for three years unless the company obtains consent from the three federal agencies. The bank is currently paying a dividend of 16 cents, halved from a 32-cent payout in the previous quarter. The agreement also places restrictions on executive compensation, including bonuses.

Importantly, the agreement calls on Citigroup to take steps to help distressed homeowners.

Specifically, Citigroup will modify mortgages to help people avoid foreclosure along the lines of an FDIC plan that was put into effect at IndyMac Bank, a major failed savings and loan based in Pasadena, Calif.

Under the IndyMac plan, struggling home borrowers pay interest rates of about three percent for five years. Rates are reduced so that borrowers aren’t paying more than 38 percent of their pretax income on housing.

The IndyMac plan also was used as a model for a new program by mortgage finance companies Fannie Mae and Freddie Mac and for two other failed thrifts taken over by the government on Friday. FDIC Chairman Sheila Bair has been pressing Treasury to use $24 billion from the $700 billion bailout program to put the mortgage modification program on national footing, but Paulson is opposed to that idea.

Citigroup has seen its shares lose 60 percent of their value in the past week, reflecting a crisis of confidence among skittish investors. They are worried all the risky debt on Citigroup’s balance sheet will turn into losses as the economy worsens and the markets stay turbulent — losses that could be nearly impossible to reverse.

Citigroup is such a large, interconnected player in the financial system that it is seen by Washington policymakers as too big to fail. The company has operations stretching around the globe in more than 100 countries.

Analysts consider Citigroup the most vulnerable among the major U.S. banks — especially after it failed to nab Wachovia Corp., which was bought instead by Wells Fargo & Co. That was a missed opportunity for Citi to gets its hands on much-needed U.S. deposits that would bolster its cash position.

Citigroup was especially hard hit by the meltdown in risky, subprime mortgages made to people with tarnished credit or low incomes. Foreclosures on those mortgages spiked, leaving Citi and other financial companies wracking up huge losses on the soured investments. The company has failed to turn a profit during the past four quarters and has announced plans to slash thousands of jobs.

The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company. All told, the moves boost aid to the company to more than $150 billion. Fed officials, however, expressed confidence that the money would be repaid to taxpayers.

The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving taxpayers an ownership stake in the company. In turn, restrictions will be placed on executive compensation at the firm.

As part of the new arrangement, the Federal Reserve is reducing a $85 billion loan it had made available to AIG to $60 billion. The Fed also is replacing a separate $37.8 billion loan to the insurance company with a $52.5 billion aid package.

The actions were needed to “keep the company strong and facilitate its ability to complete its restructuring process successfully,” the Federal Reserve said.

And that would be good for the fragile U.S. economy, said White House press secretary Dana Perino.

The new package “will allow AIG to continue to restructure themselves in a way that will not hurt the overall economy. AIG is a large, interconnected firm,” she said.

If the company were to fail, it would wreak havoc on the country’s already ailing economic health, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke determined back in September when the government first moved to help AIG, Perino said.

Shares of AIG added 32 cents, or 15.2 percent, to $2.43 in early-afternoon trading. The company’s stock has traded between $1.25 and $62.30 in the past year.

It marked the first time money from the $700 billion bailout package Congress enacted last month has gone to any company other than a bank.

Struggling U.S. auto companies — General Motors Corp., Ford Motor Co. and Chrysler — have been pressing the government for more financial assistance. The money would be on top of the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.

The Treasury Department, which is overseeing the bailout program, has promised to inject $250 billion into banks in return for partial ownership. The original notion behind the bailout package was to help financial institutions lend money more freely again, one of the main reasons the economy is in danger of getting stuck in a long and painful recession.

Until Monday, all of AIG’s bailout relief was coming from the Fed.

The Fed, earlier this year, said it would loan a total of $123 billion to AIG. The insurance company was later allowed to access another $20.9 billion through the Fed’s “commercial paper” program. That’s where the Fed is buying mounds of companies’ short-term debt often used for crucial day-to-day expenses, such as payrolls and supplies.

Monday’s restructuring provides AIG with easier terms on the original Fed loan. The new package reduces the interest rate AIG will pay and will extend the loan term to five years from two, reducing the need for AIG to sell off business lines and other assets at firesale prices to repay the government.

Under the new $52.5 billion package, the loans will last for six years. Through two new facilities, the Fed will fund the purchase of both residential mortgage-backed securities from AIG’s portfolio, and collateralized debt obligations, which are complex financial instruments that combine various slices of debt.

By taking these troubled assets off AIG’s balance sheet, it should take stress off the company, giving it more breathing room and helping to prevent future losses, Fed officials said. The Fed doesn’t believe it will suffer losses because it is hopeful the market for such distressed investments will recover as the economy and financial markets rebound.

AIG reported Monday that continued financial market turmoil resulted in a large third-quarter loss.

The New York-based company said it lost $24.47 billion, or $9.05 per share, after a profit of $3.09 billion, or $1.19 per share, a year ago.

Results included pretax losses of $18.31 billion tied to the declining value of AIG’s investment portfolio. They also were hurt by catastrophe losses and charges related to restructuring.

Excluding items, operating losses totaled $3.42 per share — missing analysts’ average loss estimate of 90 cents per share, according to Thomson Reuters.

In early October AIG said it would sell certain business units to pay off the $85 billion Fed loan. The company, however, said it plans to retain its U.S. property-and-casualty and foreign general insurance businesses. It also plans to keep an ownership interest in its foreign life-insurance operations.

AIG is a colossus on Wall Street and financial districts worldwide, with operations in more than 130 countries and $1 trillion in assets on its balance sheet.

Besides life, property and other insurance offerings, AIG provides asset-management services and airplane leases. Its myriad businesses are also linked to mutual funds, annuities and other retirement products held by millions of ordinary Americans.

But perhaps the biggest concern about AIG is the dizzying array of complex financial instruments it structured for commercial banks, investment banks and hedge funds around the globe — many of which were directly or indirectly linked to the value of U.S. mortgages.

The nation’s unemployment rate bolted to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, stark proof the economy is almost certainly in a recession.

The new snapshot, released Friday by the Labor Department, showed the crucial jobs market deteriorating at an alarmingly rapid pace.

The jobless rate zoomed to 6.5 percent in October from 6.1 percent in September, matching the rate in March 1994.

Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 percent in June 2003.

October’s decline marked the 10th straight month of payroll reductions, and government revisions showed that job losses in August and September turned out to be much deeper. Employers cut 127,000 positions in August, compared with 73,000 previously reported. A whopping 284,000 jobs were axed in September, compared with the 159,000 jobs first reported.

So far this year, a staggering 1.2 million jobs have disappeared. Over half of the decrease occurred in the past three months alone.

About 10.1 million people were unemployed in October, an increase of 2.8 million over the past year. A year ago, the unemployment rate stood at 4.8 percent.

The employment market is much weaker than economists expected. They were forecasting the unemployment rate to climb to 6.3 percent in October and for payrolls to fall by around 200,000.

Job losses were widespread, reflecting the mounting carnage from a trio of crises — housing, credit and financial.

Factories cut 90,000 jobs, the most since July 2003. Construction companies got rid of 49,000 jobs with heavy losses in home building. Retailers cut payrolls by 38,000. Professional and business services reduced employment by 45,000. Financial activities cut 24,000 jobs, with heavy losses in mortgage banking and at securities firms. Leisure and hospitality axed 16,000 positions.

All those losses more than swamped some gains elsewhere, including in the government, as well as in education and health care.

Racing to assemble his new Democratic Cabinet, President-elect Barack Obama will huddle with economic advisers later on Friday. His team has been in close contact with the Bush administration to pave the way for a smooth hand-off of power.

All the economy’s woes — a housing collapse, mounting foreclosures, hard-to-get credit and financial market upheaval — will confront Obama when he assumes office early next year. And, the employment situation is likely to get worse.

Many expect the jobless rate to climb to 8 percent, possibly higher, next year. In the 1980-1982 recession, the unemployment rate rose as high as 10.8 percent before inching down.

To provide fresh relief, House Speaker Nancy Pelosi said Democrats, in a lame-duck session later this month, are pushing to enact another round of economic stimulus of around $100 billion.

Average hourly earnings rose to $18.21 in October, a 0.2 percent increase from the previous month, according to the Labor Department report. Over the past year, wages have grown 3.5 percent, but paychecks aren’t stretching that far because high food, energy and other prices has propelled overall inflation at a faster pace.

To prevent the country from sinking into a deep and painful recession, the Federal Reserve last week ratcheted down interest rates to 1 percent and left the door open to further reductions.

The economy has lost its footing in just a few months. It contracted at a 0.3 percent pace in the July-September quarter, signaling the onset of a likely recession. It was the worst showing since 2001 recession, and reflected a massive pullback by consumers.

As U.S. consumers watch jobs disappear, they’ll probably retrench even further, spelling more trouble for the sinking economy.

That’s why analysts predict the economy is still shrinking in the current October-December quarter and will contract further in the first quarter of next year. All that more than fulfills a classic definition of a recession: two straight quarters of contracting economic activity.

Nine major banks will participate initially including all of the country’s largest institutions, he announced, in a move that sent stocks soaring on Wall Street.

Some of the nation’s largest banks had to be pressured to participate by Treasury Secretary Henry Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts.

“We regret having to take these actions,” Paulson said. “Today’s actions are not what we ever wanted to do — but today’s actions are what we must do to restore confidence to our financial system.”

It was the latest in a long series of moves taken by the administration and the Federal Reserve over the past several weeks to prop up a weakening financial industry. The economic picture in the United States had been darkening for months, but the slump took on new urgency — and had greater global repercussions — amid record-setting selloffs on Wall Street and enactment of a $700 billion bailout bill.

Under the new multifaceted stabilization program described Tuesday, the government will initially buy stocks in nine major U.S. banks. When financial markets stabilize and recover, the banks are expected to buy the stock back from the government, Bush said in brief remarks from the White House Rose Garden.

“These efforts are designed to directly benefit the American people by stabilizing the financial system and helping the economy recover,” he said.

Paulson told a Treasury Department news conference that the aggressive government intervention was “what we must do to restore confidence in our financial system.”

The Federal Reserve, meanwhile, announced that it will begin buying vast amounts of short-term debt on Oct. 27 — its latest effort to break through a credit clog. The Fed is invoking Depression-era emergency powers to buy commercial paper — a crucial short-term funding that many companies rely on to pay their workers and buy supplies. Last week the Fed said it intended to take the action but didn’t specify when.

Fed Chairman Ben Bernanke welcomed all the new steps and said he believes they will help ease problems plaguing financial markets and threatening the economy. However, he also made clear that policymakers would continue to take actions as needed to battle the crisis.

“Our strategy will continue to evolve and be refined as we adapt to new developments and the inevitable set backs,” he said. “But we will not stand down until we have achieved our goals of repairing and reforming our financial system and thereby restoring prosperity to our economy.”

“The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it,” Paulson said, meaning that they will use the money to bolster lending to each other and to their customers.

“Government owning a stake in any private U.S. company is objectionable to most Americans — me included,” he added. “Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

Said Bernanke: “We will not stand down until we have achieved our goals of repairing and reforming our financial system and thereby restoring prosperity to our economy.”

The move, in effect a partial nationalization of the banking system, does put the United States in the awkward position of owning shares in institutions it also regulates. The shares purchased by the government are expected to be nonvoting ones.

“The government’s role will be limited and temporary,” Bush pledged. “These measures are not intended to take over the free market but to preserve it. He said these steps and other related actions echoed similar bold moves made overseas in an effort to prevent a global recession. Bush said that by restoring confidence in the system, the hope is to “return our economy back to the road of growth and prosperity.”

He said that the efforts to rescue the nation’s battered financial sector was a short-term move to help banks to be able to begin lending again.

Executives of the country’s biggest banks were summoned to a remarkable meeting at the Treasury Department on Monday to be briefed on the plan. Paulson basically told the bank CEOs that they had to accept the government stock purchases for the good of the U.S. economy.

The administration plans to spend $250 billion this year on the stock purchases and the president certified Tuesday that another $100 billion would be needed in connection with covering bad assets. That would leave $350 billion of the $700 billion program, presumably to be spent by the next president.

The action represents a remarkable turnaround for a rescue program that was already the largest bailout in U.S. history. As the plan sped through Congress, the administration said the money was needed to purchase bad mortgage-related assets that are weighing on the books of financial institutions, never mentioning direct stock purchases.

However, as the financial crisis gained new intensity last week, sending U.S. stocks down by a record amount, the administration decided to shift focus and adopt a bolder program modeled more along the lines of bank rescue efforts being put together in Britain and other European countries.

Tuesday morning’s Wall Street advance took the Dow Jones industrials up more than 300 points and followed the Dow’s historic 936-point jump Monday, when investors were buying in anticipation of the government’s plan.

After the purchase of preferred stock in nine large banks, the new program is expected to be expanded to many others. Among the initial banks participating will be all of the country’s largest institutions, including Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, said one official, with each institution expected to receive billions of dollars in return for the sale to the government of preferred shares.

The advantage to the taxpayer is that if the rescue plan works, then the shares can be sold for more than the government initially paid, providing a profit on the transaction.

At a briefing, Treasury officials said that the first purchases of stock from the nine major banks will begin within days and will total $125 billion. The government expects to spend the entire $250 billion slated for the bank stock purchase program by the end of the year.

In addition to the stock purchases, the Federal Deposit Insurance Corp. will temporarily provide insurance for loans between banks, charging the banks a premium for doing so.

This FDIC program would take the form of providing insurance for new “senior preferred” debt that one bank would lend to another. This debt would be insured by the FDIC for three years, helping to unlock bank-to-bank lending, which has fallen dramatically because of fears about repayment in the face of billions of dollars of bank losses because of bad loans, primarily in mortgages.

The FDIC will also remove temporarily the current $250,000 limit on FDIC insurance on bank deposits for non-interest-bearing accounts. This primarily would benefit businesses who use non-interest-bearing accounts to run their companies. That money now would be insured, removing the need for companies to juggle funds among multiple bank accounts to stay under the $250,000 limit.

Congress, as part of the bailout bill, temporarily boosted the deposit insurance cap from $100,000 to $250,000, an action that will not be affected by the new program.

The $700 billion rescue program will continue to feature the purchase by the government of banks’ bad assets, but the administration decided to place greater emphasis on the stock purchase program after doubts were raised about how long it might take to get the asset purchase program up and running.

Treasury officials said Tuesday that they still plan to buy troubled assets and that this program would start as soon as possible.

Democrats in Congress, while supportive of Paulson’s desire to expand the program, complained Monday that not enough strings were being attached, such as restricting excessive compensation for Wall Street executives who raked in millions of dollars in bonuses by pursuing risky investment strategies that now have helped push the U.S. financial system to the brink.

Paulson said companies which sell stock to the government will be required to accept restrictions on executive compensation including a ban on golden parachutes for the period in which Treasury holds the banks’ stock.

Worried about the slumping U.S. economy only three weeks from the elections, House Republicans and Democrats on Monday pushed for fresh action to prevent a serious downturn. Democrats scheduled hearings to consider a postelection stimulus package that could cost as much as $150 billion. Republicans called for more tax cuts and energy exploration.

In a campaign speech in Ohio, Democratic presidential nominee Barack Obama proposed a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs. His Republican opponent, John McCain, promised a change in direction from the Bush administration‘s economic policies.